NRG Energy seeks partners in nuclear energy

NRG Energy said yesterday a business unit it formed this week is looking to partner with other energy companies to develop nuclear power projects at sites where nuclear plants already operate.

The new unit, Nuclear Innovation North America, will focus on marketing, developing and financing projects across the country, including two units the company has proposed building at an existing site in South Texas. NRG, based in Princeton, has applied to the Nuclear Regulatory Commission to build the first new reactor in the United States in more than three decades.

Toshiba, which will invest $300 million in the NRG unit over the next six years, will be the prime contractor for the projects.

In a conference call with analysts yesterday, NRG Energy Chief Executive David Crane said the new unit provides the framework for the company to add additional nuclear megawatts to its fleet of power plants and reduce its carbon footprint.

"My level of confidence in this project is as high as it has ever been," Crane said in a call from Tokyo.

Nuclear Innovation anticipates providing a letter of intent to the Nuclear Regulatory Commission for at least one project in addition to Texas by the end of the year. Crane would not specify which power producers NRG might partner with, but said it would seek out companies in NRG's core markets in unregulated states.

In New Jersey, which has an unregulated energy market, Newark-based Public Service Enterprise Group operates three nuclear power stations in South Jersey and has said it will decide by the end of the year whether to seek to build a fourth unit.

Joe Delmar, a spokesman for PSEG Nuclear, which operates the South Jersey plants, said the company has no agreement with NRG Energy to build another reactor at the site. "We're looking at everything. We'll explore all possibilities," he said.

Crane said the partnership with Toshiba allows it to work with a company that has been successful with on-time, on-budget nuclear construction in other countries. Toshiba has built two reactors in Japan using the same design it will use in Texas.

Given the long time it takes to bring a nuclear project to fruition, analysts said it is too soon to say whether NRG's model will generate big returns.

"It's hard to tell who is going to be the most successful in pursuing this strategy," said Paul Fremont, an analyst with Jefferies & Co.

Tom Johnson may be reached at tjohnson@starledger.com or (973) 392-5972.